WASHINGTON — The U.S. Treasury Department issued a notice of proposed rulemaking Monday targeting the core licensing requirements of the GENIUS Act — the stablecoin law signed in 2025 — and the proposed rules set two hard legal deadlines that will force every stablecoin issuer and crypto exchange serving U.S. customers to either obtain government authorization or exit the market.
The first deadline falls on Jan. 18, 2027, the expected effective date of the GENIUS Act. From that date forward, any person or entity that issues a payment stablecoin in the United States must hold an appropriate federal or state license. Violations carry fines of up to $1 million and up to five years in prison, according to the proposed rulemaking.
The second, broader deadline hits July 18, 2028. After that date, digital asset service providers — exchanges, brokers and wallet platforms — generally cannot offer or sell any payment stablecoin to a person located in the United States unless the stablecoin comes from a licensed issuer. That restriction applies to foreign-issued stablecoins as well as domestic ones.
The proposed rule draws its authority from Section 3 of the GENIUS Act, which governs the fundamental architecture of the U.S. payment stablecoin market. Treasury is proposing two core legal definitions: what it means to "issue a payment stablecoin in the United States," and what it means to "offer or sell" one to a person "in the United States." Those definitions will determine which companies must register, which transactions trigger compliance obligations and whether foreign issuers can legally access U.S. distribution channels.
The extraterritorial reach of Section 3 is explicit in the statute. The provision applies whenever conduct involves the offer or sale of a payment stablecoin to a person located in the United States, regardless of where the issuer is domiciled. A foreign stablecoin issuer seeking access to U.S. customers must demonstrate the technological capability to comply with lawful orders and satisfy any reciprocal arrangement between the United States and the issuer's home jurisdiction — conditions Treasury's definitions will now need to operationalize.
For U.S.-based issuers, the Jan. 18, 2027 deadline is the operative constraint. For the much larger universe of crypto platforms that distribute stablecoins — including centralized exchanges that list assets issued by third-party providers — the July 18, 2028 cutoff is the controlling date. The 18-month gap between the two deadlines gives distributors time to vet whether the stablecoins they carry come from licensed sources.
Treasury Secretary Scott Bessent, in a statement Monday, said the department is moving to implement the law quickly. "President Trump and Congress delivered the GENIUS Act, establishing a landmark framework and clear rules of the road for payment stablecoins, and Treasury is moving quickly to implement that framework," Bessent said. "Treasury welcomes input from stakeholders as we work to provide the regulatory certainty businesses need to innovate."
The proposed rulemaking follows an advance notice of proposed rulemaking Treasury issued last September, which sought public comment on a broad range of GENIUS Act implementation questions. Treasury also issued a separate request for comment last August focused specifically on detecting illicit activity in the stablecoin market. Monday's notice moves from that exploratory phase to a concrete proposed rule, though the final rule has not been published and the comment period remains open for 60 days.
The 60-day comment window is the next formal checkpoint. Industry participants — including stablecoin issuers Tether and Circle, as well as exchanges such as Coinbase and Kraken that distribute multiple stablecoin products — have until the close of that window to submit positions on how Treasury defines the two central legal terms. The definitions Treasury ultimately adopts will determine whether a transaction executed on a foreign exchange with a U.S.-based user triggers domestic licensing requirements, a question with direct commercial consequence for offshore issuers.
The stablecoin market is not small. Tether's USDT and Circle's USDC together account for the dominant share of stablecoin supply, and both products are widely distributed across U.S.-accessible platforms. The licensing framework Treasury is building will determine which of those products retain access to U.S. distribution and which face redesign or withdrawal.
The counterargument to rapid implementation is definitional ambiguity. Where Treasury draws the line on what constitutes an offer or sale "in the United States" will either capture routine cross-border transactions or carve them out. A narrow definition benefits foreign issuers; a broad one extends U.S. jurisdiction well beyond domestic platforms. Treasury has not yet resolved that line — it is precisely what the 60-day comment process is designed to address.
